First posted on May 5, 2010.
I do a lot of bellyaching around here about how there are never any consequences for filing frivolous trademark and copyright lawsuits. What’s the worst thing that can happen to a well-heeled plaintiff that wants to use the expense of defending, even meritoriously, against a “federal case” as a way to effectuate a “business message” (namely, you’re out of business, because we say so)? Usually, nothing. Not just usually. Really pretty much a lot usually.
Not this time. This is a little dense if you’re not used to reading judicial opinions, but the payoff is worthwhile. Emphasis is mine:
The Franklin Mint Company and its principals, Stewart and Lynda Resnick, (collectively, Franklin Mint) appeal from a judgment dismissing their malicious prosecution action against the law firm Manatt Phelps & Phillips LLP and attorney Mark S. Lee (collectively, Manatt). Manatt represented the executors of the estate of Diana, Princess of Wales and the trustees of The Diana, Princess of Wales Memorial Fund (collectively, the Fund) in a lawsuit filed against Franklin Mint alleging claims related to Franklin Mint’s use of Princess Dianaâ€Ÿs name and image in connection with merchandise Franklin Mint advertised and sold. . . .
We conclude that, based on the record before us, no reasonable attorney could find tenable the false advertising claim as it was alleged and litigated in the underlying action. Therefore, we hold there was no probable cause to prosecute that claim. We also hold there was no probable cause to prosecute the trademark dilution claim because no reasonable attorney could conclude that the claim could satisfy two fundamental, long-standing principles of trademark law. First, to be protectable as a trademark, a word, phrase, name, or symbol must be used in commerce to identify goods or services and their source. Although Manatt contends that Princess Diana used her name in connection with her appearances at charitable events, that use does not demonstrate trademark use. Second, a trademark that is descriptive — such as a personal name — must acquire secondary meaning to be protectable in a trademark dilution action. In other words, the primary meaning of the mark (i.e., the descriptive meaning) must in the minds of the public be subordinate to its meaning as the source of goods or services. Because “Diana, Princess of Wales” has such an extraordinarily strong primary meaning as descriptive of Princess Diana as a person, the contention that it had acquired secondary meaning at the time of the underlying lawsuit was, as the district court in the underlying lawsuit observed, “absurd.” (Cairns v. Franklin Mint Co. (C.D. Cal. 2000) 107 F.Supp.2d 1212, 1222 (Cairns III).) Therefore, we conclude that the trademark dilution claim was untenable.
Now this is really interesting on several levels. One is the obvious one I’ve already alluded to–a court calling attorneys out and saying, “Stop the baloney. You knew what you were doing here was fallacious, but you just kept doing it. If malice and damages are proved, that’s actionable.” It’s astonishing to read that. Don’t even ask what has happened, in my own experience in the vaunted federal courts facing just such claims, that leaves me so dumbstruck reading this.
But then there’s the substantive legal stuff. Diana, Princess of Wales, not a “trademark”? Just because she’s mostly really a person (no longer a living one, granted, but you get the idea)? But what about all those other celebrity trademark names?
[I]t is not sufficient for trademark purposes that Princess Dianaâ€Ÿs name was used in the promotion of charity events as part of a textual reference to Princess Diana as an individual; the term “Diana, Princess of Wales” had to be used in a trademark sense, to identify services that were being performed. (In re Carson, supra, 197 U.S.P.Q. 554; In re Lee Trevino Enterprises, Inc., supra, 182 U.S.P.Q. 253.) But more importantly, there is a critical distinction between the celebrity cases and the case of Princess Diana. Elvis Presley, Glenn Miller, Johnny Carson, and chef Paul Prudhomme achieved public name (or image) recognition in connection with their provision of services. Princess Diana did not. Thus, although the “primary meaning” of the celebritiesâ€Ÿ names (or images) was to describe them as individuals, the public did not know their names or images except through their services, i.e., in the “secondary meaning” sense. In contrast, the public knew Princess Dianaâ€Ÿs name and image, and came to strongly associate “Diana, Princess of Wales” with the person (the “primary meaning”), long before she became associated with charitable work. Therefore, unlike the previously unknown celebrities, whose names did not have a strong “primary meaning” to overcome in the mind of the public and could achieve secondary meaning simply by promoting their names in association with the entertainment services they provided, Princess Dianaâ€Ÿs name had such an extraordinarily strong “primary meaning” it is doubtful that the words “Diana, Princess of Wales” could ever overcome that “primary meaning.”
This is fascinating. Princess Di was so famous for nothing–which is, after all, what the “royals” “do”–that even when she later on kind of did some things, those things couldn’t touch her fame for nothingness. Princess Di was too famous for just being Princess Di, which was of course her signal achievement, to ever acquire secondary meaning!
Frankly, this is not the least bit obvious to me. Manatt, too, argued that, well, heck, that’s a new one on us, Your Honors. To which their Honors replied:
Manatt argues, however, that we should not find that the claim lacked probable cause, because the issues are complex and there is no directly controlling authority. But the fundamental principles of trademark law — a trademark must identify a source of a product or service, and a descriptive mark such as a personal name must acquire secondary meaning in the minds of the public — were clear and well-established, and their application to this case is straightforward and uncomplicated. The complexity of the issues arises only from Manattâ€Ÿs attempts to avoid those fundamental principles. Accordingly, we reverse the judgment and remand for trial on malice and damages issues.
Now I am rather conflicted-feeling and all. I liked the idea of this: Big Law gets bench-slapped for frivolous litigating and faces liability for the same. But, well, I … I just don’t know!
And here’s another problem. Originally, above, I skipped over the procedural stuff and of course you’ll want to read the whole opinion, below. But here’s what I had excised:
After a 17-day jury trial, the trial court granted Manattâ€Ÿs motion for nonsuit or directed verdict, finding that Manatt had probable cause to prosecute those claims. We reverse.
OK, so the cost of proceeding with legally insufficient claims here becomes a lot more obvious: 17 days in the trenches before the directed verdict. This shifts some of my sympathy back to Franklin Mint again, but how do you go through almost four weeks of jury trial without resolving the legal issues first?
Well, they were resolved! The District Court had, in the underlying lawsuit, dismissed the claims and–contrary to what some people say about the awarding of defendants’ fees–awarded a whole slew of them here!
The court noted that the dilution claim “was based on the ‘absurd’ contention that ‘Diana, Princess of Wales’ had taken on a meaning other than identification of an individual,” and remarked that arguing that that name had acquired secondary meaning “falls just short of frivolous.” The court also noted that the false advertising claim was groundless because the statements at issue were true, and the Fund presented no evidence to cast doubt on their veracity. The court concluded that the claim also was unreasonable because the Fund “should have either not brought the claim in the first instance, or voluntarily dismissed it when it was clear that there was no evidence to support it.”
Having found that the trademark dilution and false advertising claims were groundless and unreasonable, the district court awarded Franklin Mint $1,635,000 for defending those two claims.
Which brings us back to the question of how this went to the jury! Answer: “It’s just laziness”–courtesy of your trial judge, this time in state court where, true to form, trial judges just won’t rule on pretrial motions hardly ever:
Both parties filed pretrial briefs on the issue of probable cause, in which Franklin Mint argued that the issue could be decided by the court based upon undisputed facts, while Manatt argued that there were factual issues that needed to be decided by the jury before the court could rule on probable cause. [The trial court punted.] The case proceeded to jury trial, without a prior determination regarding probable cause. After Franklin Mint rested, Manatt filed a motion for nonsuit based on probable cause. The trial court did not rule on the motion at that time [either], and the jury trial continued. Shortly before the close of evidence, the court stated that it would allow Manatt to orally supplement the motion in order to consider it as a motion for a directed verdict.
Looks like the party to sue here is the trial court, which could have not only resolved these issues for appeal without a 17-day trial, but could have even done so half way through the damned thing, too.
Lots going on here. But this is some fine stuff on federal trademark law and the tort of malicious prosecution from a “mere” state appellate court.
And I stand by my earlier assertions, by the way, about defendants’ fees: Sure, some defendants get them. Just not penurious ones. Nope, if you want to get a trial judge’s attention such that he’ll award you fees for turning away a meritless Lanham Act claim….
You’ve got to own a MINT!
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